Goldman Sachs is facing the threat of an external audit of its derivatives business.
According to the Financial Times, the chairman of the Financial Crisis Inquiry Commission could force Goldman Sachs to allow accountants to search in the bank’s systems to look for data that the commission has requested.
Goldman Sachs insisted that it does not separate or track trading revenue generated solely from derivatives. It claimed that the information does not give much insight into the bank’s trading risks because many trades involving a derivative contract also include a cash security to offset the risk.
However, Phil Angelides chair of the commission, was sceptical.
He told the FT: “It’s not credible that that’s a black hole. It defies logic that these institutions have no clue of how much money they are making or losing from these derivatives.
“These banks have become trading operations. This is essential information. It’s the centre of their business.”
Angelides said the commission will pursue all of its options to obtain the information.
“We’re going to continue to press this very hard,” he added.
Goldman Sachs told ComputerworldUK: “We continue to work with the commission and its staff.”
Earlier this year, Goldman Sachs faced questions over its business practices when press reports said it had bet against its own clients, when it changed its housing market position in 2007, before the price crash.